United Kingdom franchise media: What soap?

August 8, 2008

UK journalists are still a lapdog when it comes to franchising.

Whenever I read the regurgitated franchisor press releases routed through the Kiwi-based Franchise-Chat.com, I want to retch. You seldom see such drivel ever making it past any self-respecting business editor in North America.

  • Kudos to the Oz and NZ rodeo clowns for wising your media to the International Brotherhood of FWW-FIBS [Franchisor Wankers Waiting for Franchise Investors to Bend down for the Soap]

A good example is the breathlessly titled: Flourishing franchises buck trend that was published by Adam Aiken at the Eastern Daily Press.

These “facts” are given to us by Natwest Bank and the British Franchise Association survey while some consultant [read: salesman] named Roy Seaman of Franchise Development Services says:

  • only 5% of franchises fail when
  • 65% of non-franchised small businesses fail.

Bullshit. Bullshit. And then more bullshit.

Please find below my very restrained email to Mr. Adam Aiken, Deputy Business Editor.

No response yet but I promise to report back, if they bother to wake up.

Date: Wed, 6 Aug 2008 21:30:13 -0400 (EDT)
From: “Les Stewart” <xxx.com>
Subject: Flourishing franchises buck trend
To: “Adam Aiken” <adam.aiken@archant.co.uk>

Adam,

I would question the credibility of the survivability of franchised versus non-franchised businesses. The North American franchise industry was well-known for bragging of such lower risks than independent businesses but was subsequently proven dead wrong by academics such as Timothy Bates, Gillian K. Hadfield and Scott Shane.

Knowledgeable scholars who study franchising issues routinely express contempt for the failure rate statistics publicized by franchisors. Francine Lafontaine, for example, states ‘one of the major selling points of franchising to franchisees over the years has been the statistics vehiculated by the trade press on the very low failure rates of franchised businesses compared to independent operations. These statistics never had real scientific basis’ (p. 14, 1994). Such criticism does not deter the industry.

Survival Patterns among Franchisee and Nonfranchised firms started in 1986 and 1987, U.S. Department of Commerce, p. 6.

The information that is in article, in my opinion, is seriously misleading to potential small business investors. I suspect an Australian site [BakersDelightLies.com] is more representative of UK investors’ experience rather than one-sided franchisor-only hyperbole.

If you’d like to take a look, I think my weblog and the U.S. Blue MauMau community provides a more independent view.

Les Stewart MBA
Midhurst, Canada
lesstewart.wordpress.com


The Apprenticeship of Les Stewart

May 17, 2008

Justice is one of the four Cardinal Virtues.

My research clearly concludes that the last place for franchisee family investors to find justice is via any franchise bar/legal system.

franchising

Background and unique qualifications:

  • Franchise Industry in Ontario (Canada): franchisee families 40,000 (76,000), employees 400,000 to 600,000 (760,000 to 1,140,000), investments $2 to 8 billion ($3.8 to 15.2 billion), and annual sales $45 to 50 billion ($90 billion), Source
  • twice a franchisee (Arjay Painting and Nutri-Lawn, Midhurst, ON),
  • a franchisee’s crew Barrie and 1st assistant manager, Orillia 3254, McDonald’s Canada (B.O.C., Silver Hat, & AAA, 1972-80),
  • general BA, 1983, Western University and MBA, 1987, Ivey Business School, London, ON,
  • Budget analyst, Victoria Hospital, London, Ontario, (acute care regional teaching hospital, 3,500 FTEs, 1988-92),
  • founded the Canadian Alliance of Franchise Operators, CAFO, Canada’s 1st national franchisee association, Midhurst, ON 1998-present,
  • SLAPP 1.0 (Strategic Lawsuit Against Public Participation): sued to silence: Nutri-Lawn‘s then owner, The Franchise Company (FirstService Corporation), represented by David Sterns and John Sotos,
  • SLAPP 2.0 sued for faxing 150 U.S. Tupperware distributors a website invitation and Toronto Star article while representing 7 former CDN Tupperware distributors, (Tupperware Canada Inc.), TupperWarsSLAPP, represented by Brian Macleod Rogers,
  • took my franchised lawn care business independent in 1998 (Lawn Depot),
  • represented myself at an injunction hearing, franchisor unsuccessfully sought to enforce their non-compete clause, Barrie, ON, 1999 (Justice Paul Herminston, Barrie), favourable outcome,
  • 5 day civil trial, (Justice Katherine Swinton, Toronto,  May 1999) and lost $134,000 unfavourable outcome,
  • unpaid policy analyst for Mr. Tony Martin, NDP MPP, Sault Ste. Marie, ON 1998 to 2001 (provincial, federal politician),
  • expert witness at public hearing which lead to Ontario’s first franchise law, Toronto, ON (Arthur Wishart Act (Franchise Disclosure), 2000),
  • created the Information Sharing Project and submitted unsuccessful project proposal to the Ontario Ministry of Consumer and Commercial Affairs in 2003 (digital teaching, due diligence and business risk assessment tool; early form of WikiFranchise.org),
  • identified and wrote a paper on Predatory Franchise Lending to Industry Canada, 2005 (18 month investigation: bank, consultant, franchisor, Office of the Privacy Commissioner of Canada, Minister of Finance, RCMP Commercial Crime Unit, OBSI, FCAC, PMO, etc.),
  • case preparation for a +$6-million civil law suit based on predatory lending principles (2005, Oudovikine),
  • Stewart has been featured in the Globe and Mail, Toronto Star, National Post, CBC, PORFIT magazine, Continental Franchise Review, and Wall Street Journal, media contributor, 1997 – present,
  • contributed to the Prince Edward Island, Ontario, West and South Australian franchise inquires,
  • Blue MauMau contributor: 459 posts (since Oct 2007),
  • founded and editor of FranchiseFool.com weblog: 1200 posts, 277,713 views & 777 comments (since Feb 2008, Accessed April 26, 2018),
  • founded and co-editor of WikiFranchise.org: a no-charge wiki that assigns corporate and personal reputations more accurately and durably via indexed already-published articles and documents: 208,821 unique visitors, 331,676 visitors, 1,283,386 pages, 2,229,354 hits and 65.8 GB bandwith (since Feb 2009, same),
  • endorsed Bill 102, An Act to amend the Arthur Wishart Act (Franchise Disclosure), September 23, 2010,  Legislative Assembly of Ontario (start @ 1440),
  • attended the International Association of Franchisees and Dealers annual conference, Indianapolis, 2010,
  • pre-trial development of large-scale group and class action legal actions,
  • independent franchisee association: leadership development, creation, training, pre-trial case legal case development (National Bread Network: Maple Leaf Foods/Canada Bread 1,000 CDN Dempster’s franchisees, leader’s blog, case preparation for a +$300-million class action law suit based on good faith, right to associate and mental distress ($50,000 award for one franchisee, 2008-2012),
  • FranchiseGrade.com: The Authority on Franchising, developed data collection methods and hierachy structure and custom reports based on U. S. Franchise Disclosure Documents, FDDs, Les Paul Stewart Consulting: work has been featured in Businessweek, Entrepreneur, Inc., and the Wall Street Journal. 2004 – 2005,
  • Dr. Gillian K. Hadfield: Problematic Relations: Franchising and the Law of Incomplete Contracts, The Price of Law: How the Market for Lawyers Distorts the Justice Systemand
  • LinkedIn

BusinessWeek franchising article

March 12, 2008

BW Logo

Please find the current Special Report on Franchising. I am quoted in the article Is It Time to Buy a buy Franchise?

“If any promise is made, you should have it in writing, and if you put it in writing and it isn’t included in a franchise agreement, you should assume you are dealing with a liar and a scoundrel,” says Stewart.

Further…

But he suggests that a majority of the new offerings being marketed are “non-sustainable,” and that the number is greater than in the past.

“These fly-by-night systems come in to the market because people allow them. They buy them and they think it’s just like McDonald’s.”

There is also a slideshow called Franchising Experts Weigh In. I’m the last guy [far right] with the red face on holiday.

“If you really have no experience in an industry, like collecting dog poop, then you should work there [first]. You need to understand what that potential franchisee is going through.”


%d bloggers like this: